51A-6A-19.2 Investments pledged to the division for the security of trust creditors of trust company--...
Investments pledged to the division for the security of trust creditors of trust
company--Income from investments--Effective date of order requiring pledge increase--Hearing.
trust company authorized by this title, shall, before transacting any such business pledge to the
division and maintain at all times investments for the security of the trust creditors of the trust
company including as a priority claim costs incurred by the division in a receivership or liquidation
of the trust company in the event it should fail. The amount of the pledge shall be determined by the
director in an amount deemed appropriate to defray such costs, but may not be less than a market
value of one hundred thousand dollars, and may not exceed five hundred thousand dollars for a
private trust company or one million dollars for a public trust company. All investments pledged to
the division shall be held at a depository institution in this state and all costs associated with
pledging and holding such investments are the responsibility of the trust company.
The investments pledged to the division shall be of the same nature and quality as those required
for public funds as provided in §§ 4-5-6 and 4-5-6.1.
The commission may promulgate rules pursuant to chapter 1-26 to establish additional
investment guidelines or investment options for purposes of the pledge required by this section.
In the event of a receivership of a trust company, the director may, without regard to priorities,
preferences, or adverse claims, reduce the pledged investments to cash and, as soon as practicable,
utilize the cash to defray the costs associated with the receivership.
Income from such investments shall belong to and be paid to the trust company as long as it
continues to conduct its business in the ordinary course and so long as authorized by the director.
The proposed effective date of an order requiring an existing trust company to increase its pledge
shall be stated in the order as on or after the thirty-first day after the date of the proposed order.
Unless the trust company requests a hearing before the commission in writing before the effective
date of the proposed order, the order becomes effective and is final. Any hearing before the
commission shall be held pursuant to chapter 1-26.
Source: SL 2010, ch 232, § 21; SL 2012, ch 233, § 1.